SECTION 1 2 3 INTRODUCTION poverty, and the injustice of millions of families living in extreme poverty alongside great wealth and prosperity will continue. Today, the rich can buy longer, safer lives and better education, and can secure jobs for their children, while those without money and influence are much more likely to be denied even their basic rights. When disasters strike or food prices spike, those who lack wealth and power suffer the most, and find it most difficult to recover. The report then looks at what is driving this rapid increase in extreme economic inequality, focusing on two major causes: market fundamentalism and the capture of power and politics by economic elites. Many, including billionaire George Soros and Nobel-laureate Joseph Stiglitz, believe that market fundamentalism is to blame for the rapid concentration of wealth over the last four decades. When politics and policy making are influenced by elites and corporations, they serve their economic interests instead of those of society as a whole. This is as true in the USA as it is in Pakistan and Mexico, and has led to government policies and actions that benefit the few at the expense of the many, further widening the inequality gap. Oxfam’s decades of experience working with the world’s poorest communities have taught us that poverty, inequality and these traps of disadvantage are not accidental, but the result of deliberate policy choices made by governments and international organizations. The world needs concerted action to build a fairer economic and political system that values the many. The rules and systems that have led to today’s inequality explosion must change. Urgent action is needed to level the playing field by implementing policies that redistribute money and power from the few to the many. The second half of the report explores some of the deliberate policy choices that will be crucial to reducing inequality. Governments and companies can take steps to ensure decent working conditions, the right for workers to organize, the right to a living wage, and to curb skyrocketing executive pay. Companies must become more transparent, and policies must be enacted to ensure that both they and rich individuals pay their fair share of taxes. Ensuring universal access to healthcare, education and social protection will mitigate the extremes of today’s skewed income distribution and will guarantee that the most vulnerable are not left behind. While there has been progress, real change will only come about if we break the stranglehold that special interests now have over governments and institutions, and if citizens demand their governments pursue policies that are about redistribution and fairness. Extreme economic inequality, the focus of this report, has exploded in the last 30 years, making it one of the biggest economic, social and political challenges of our time. Age-old inequalities, such as gender, caste, race and religion, are injustices in themselves, and are also worsened by the growing gap between the haves and the have-nots. As Oxfam launches the Even it Up campaign worldwide, we join a groundswell of voices, such as billionaires like Warren Buffet, faith leaders like Pope Francis, the heads of institutions, like Christine Lagarde of the IMF, as well as the World Bank, trade unions, social movements, women’s organizations, academics and millions of ordinary people, to demand that leaders tackle extreme inequality before it is too late. 26
A view across Santa Marta favela and central Rio de Janeiro (2006). Photo: John Spaull 1 EXTREME INEQUALITY A story that needs a new ending